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Neuhalfen v. North Dakota Workforce Safety & Insurance Fund

May 15, 2009


Appeal from the District Court of Ward County, Northwest Judicial District, the Honorable William W. McLees, Judge.

The opinion of the court was delivered by: Kapsner, Justice.


[¶1] Scott Neuhalfen appeals from a district court judgment affirming a Workforce Safety and Insurance ("WSI") order requiring him to forfeit future benefits relating to his claim and to reimburse $11,500.47 for benefits WSI previously paid. We conclude a reasoning mind reasonably could have concluded Neuhalfen made false statements sufficiently material to support both forfeiture of future benefits and reimbursement of benefits paid. We affirm.


[¶2] On March 30, 2006, Neuhalfen submitted a claim for benefits to WSI, asserting that he injured his lower back while employed as a baker with Marketplace Foods in Minot. Neuhalfen reported that while "reaching across a pallet to lift a case of frozen donuts to stock them," he "felt a pop in [his] lower back," which was stiff and swollen a few hours later. Neuhalfen received chiropractic treatment that day for low back pain. In Neuhalfen's first report of injury, he indicated he had strained his right lumbar spine. Neuhalfen testified that a representative from his employer's personnel department assisted him in filling out the injury report based on Neuhalfen's responses. On the injury report, Neuhalfen checked a box stating he had prior problems or injuries to that part of the body; however, below the checked box under a section entitled "Witness(es) to the Injury," Neuhalfen indicated "in upper back, not lower."

[¶3] On March 31, 2006, WSI accepted Neuhalfen's claim for "[l]umbar sprain and strain" and began paying benefits. A WSI claims adjuster testified she accepted the claim based upon Neuhalfen's injury report. According to the claims adjuster, after she began receiving treatment notes she decided "on a hunch" to check records from Neuhalfen's previous chiropractic treatment because chiropractors usually treat the "whole back, not just a specific part." The adjuster also said she wanted to make sure she had all the records. The adjuster testified that when she received records indicating Neuhalfen had previously received treatment for his lower back, she sought additional medical records, including records from other chiropractors identified in the notes. Those medical records reflected Neuhalfen had sustained injuries to his lower back in a motor vehicle accident in 1993. The claims adjuster testified that because she was aware of the prior car accident, she also requested prior treatment records from Trinity Hospital for that accident.

[¶4] In a July 13, 2006, letter, Neuhalfen's employer wrote to WSI questioning whether Neuhalfen's work injury was an exacerbation of a previous injury from the car accident. On July 19, 2006, another WSI claims adjuster spoke to Neuhalfen as a part of a "three-point contact," where contact is made with the claimant, employer, and medical provider. Neuhalfen reportedly told this claims adjuster that he had "no priors except many years ago with shoulder and knee but no permanent restriction or work loss" and that an MRI showed a herniated disc resulting from his work injury. On July 28, 2006, Neuhalfen had a video-recorded conversation with his claims adjuster. During the conversation, Neuhalfen offered to release any records regarding the car accident, and mentioned injuries to his head, shoulders, and knee, but did not mention any prior treatment to his low back.

[¶5] In mid-July 2006, Neuhalfen had a lumbar MRI scan on his back, which the radiologist concluded showed: "L5-S1 discal degeneration with eccentric left disk herniation partially obliterating the left lateral recess fat and extending into the left L5-S1 foramen. This would manifest as a left L5 and left S1 radiculopathy." On August 3, 2006, WSI issued a "Notice of Decision Approving Medical Condition," accepting liability for "[d]isplacement of lumbar intervertebral disc without myelopathy." WSI thereafter continued to receive medical records regarding Neuhalfen's prior medical treatment.

[¶6] In September 2006, WSI investigators interviewed Neuhalfen regarding his pre-existing low back condition. Additionally, WSI's medical consultant, Dr. Gregory Peterson, reviewed Neuhalfen's claim. Dr. Peterson concluded Neuhalfen had chronic neck and low back pain and memory complaints after his 1993 car accident and opined Neuhalfen's spine condition was pre-existing and his work merely triggered his symptoms.

[¶7] On October 10, 2006, WSI issued a Notice of Intention to Discontinue Benefits, notifying Neuhalfen that he had violated N.D.C.C. § 65-05-33 by willfully and intentionally making material false statements for failing to disclose his prior treatment for his low back. The notice extensively detailed Neuhalfen's prior medical records in addition to addressing Neuhalfen's previous 1993 automobile accident, which had resulted in prior low back pain and treatment. Neuhalfen requested reconsideration. In December 2006, WSI issued an order denying Neuhalfen further benefits for willful false statements regarding his prior low back treatment and requiring him to reimburse WSI $11,500.47 for benefits paid from June 23, 2006, through October 31, 2006, based upon his false statements.

[¶8] Neuhalfen requested a formal administrative hearing, and a hearing was held before an administrative law judge ("ALJ") in June 2007. In September 2007, the ALJ issued recommended findings of fact, conclusions of law and an order. WSI adopted the ALJ's recommended decision as WSI's final order, finding Neuhalfen's false statements impeded WSI's determination of his eligibility for benefits and caused WSI to pay benefits for a pre-existing low back condition relating to his prior motor vehicle accident. WSI's final order concluded Neuhalfen forfeited further benefits relative to his injury and required Neuhalfen to reimburse WSI for benefits paid based upon his false statements. Neuhalfen appealed WSI's final order to the district court, which entered judgment affirming WSI's order.


[¶9] Courts exercise limited review in appeals from administrative agency decisions under the Administrative Agencies Practice Act, N.D.C.C. ch. 28-32. Fettig v. Workforce Safety & Ins., 2007 ND 23, ¶ 9, 728 N.W.2d 301; Forbes v. Workforce Safety & Ins. Fund, 2006 ND 208, ¶ 10, 722 N.W.2d 536. The district court under N.D.C.C. § 28-32-46, and this Court under N.D.C.C. § 28-32-49, must affirm an administrative agency decision unless:

1. The order is not in accordance with the law.

2. The order is in violation of the constitutional rights of the appellant.

3. The provisions of this chapter have not been complied with in the proceedings before the agency.

4. The rules or procedure of the agency have not afforded the appellant a fair hearing.

5. The findings of fact made by the agency are not supported by a preponderance of the evidence.

6. The conclusions of law and order of the agency are not supported by its findings of fact.

7. The findings of fact made by the agency do not sufficiently address the evidence presented to ...

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